The New Zealand dollar fell from its New York highs at the end of last week, having jumped against the greenback after China unexpectedly cut interest rates and European Central Bank President Mario Draghi pledged to whatever was needed to underpin the region's economy.
The kiwi traded at 78.76 US cents at 8:30am in Wellington from as high as 79.47 cents in New York on Friday and from 78.81 cents in late Asian trading last week. The trade-weighted index fell to 78.57 from as high as 78.96 in New York trading.
Stock markets rallied and the Australian and New Zealand dollars gained on Friday after China unexpectedly lowered interest rates for the first time since July 2012, while Draghi pledged that policy makers "will do what we must to raise inflation and inflation expectations as fast as possible." The People's Bank of China cut its benchmark lending rate by 40 basis points to 5.6 per cent in a move that may support demand in the biggest market for Australia and New Zealand.
"The move reflects Chinese policymakers' determination to keep growth above 7 per cent year-on-year," said Imre Speizer, strategist at Westpac Bank.Markets reversed soon afterwards without any obvious catalyst."
